BioAmber Announces Year End Operational and Financial Results for 2016

Mar 16, 2017

MONTREAL, March 16, 2017 /CNW Telbec/ - BioAmber Inc. (NYSE: BIOA), a leader in renewable materials, today announced operational and financial results for the three months and year ended December 31, 2016. 

Operational Highlights

  • 2016 sales of bio-succinic acid were $8.3 million, an increase of 281% over the previous year.
  • Over 200 companies globally have now tested and qualified the bio-succinic acid produced at our Sarnia facility.
  • Operations have shown greater consistency with both variable and fixed costs remaining on target, and off-specifications product below 5% in Q4.

Strategic Highlights

  • On December 19th, 2016, we announced a non-binding letter of intent (LOI) with CJ CheilJedang Corporation (CJCJ) to establish a joint venture in China to produce up to 36,000 metric tons of bio-succinic acid and commercialize the output in Asia. CJCJ will incur all capital costs required to retrofit their fermentation facility and ramp up production.
  • We successfully completed the first two phases of the four-phase process for a $360 million loan guarantee from the U.S. Department of Energy (U.S. DOE). This is an important milestone to secure financing for our proposed second facility.

"While our Sarnia facility has continued to showcase BioAmber's world leading disruptive bio-technology, the LOI with CJCJ validates its robust economics and provides an example of how BioAmber can further leverage its technology for the benefit of shareholders." stated Fabrice Orecchioni, BioAmber's President and Chief Operations Officer. "In addition to our operational success and following our recent equity raises, we have paid off our corporate debt in its entirety, and are looking to secure a Toronto Stock Exchange (TSX) listing before the end of April 2017", he added.

Q4 2016 Financial Highlights

  • Our fourth quarter 2016 product sales of approximately $631,000 were below our previously disclosed fourth quarter expectations of $2.0 to $2.2 million. We expected that additional revenue of approximately $1.4 million would be recorded in the quarter but it had to be deferred until 2017 and was classified as a deferred revenue as of December 31, 2016.
  • The entire cash proceeds from the sale have been received by BioAmber.
  • We received gross proceeds of $7.0 million from our December 2016 equity issuance.
  • In December 2016, we issued a $8.9 million special warrant that will be converted into common shares at the same price as the price per share of the equity issuance completed in December 2016. The proceeds are presently held in escrow and can be released to BioAmber upon the occurrence of a TSX listing which is expected before the end of April, 2017.
  • Cash on hand was $16.2 million as of December 31, 2016. The balance does not include the proceeds of the $8.9 million special warrant currently held in escrow.
  • Subsequent to our year-end, we received gross proceeds of $20.1 million from our January 27th equity issuance, and reimbursed our corporate debt in full on January 27, 2017.

Full-Year 2016 Financial Results

Revenues for the year ended December 31, 2016 were $8.3 million.  The 281% increase relative to the previous year was driven by an increase in the quantity of bio-succinic acid sold from our Sarnia operations.

Cost of goods sold increased from $2.6 million for the year ended December 31, 2015 to $13.7 million for the year ended December 31, 2016, primarily explained by an increase in volume sold, as well as Sarnia facility ramp-up costs, including fixed costs and reprocessing costs for off-specification product that were allocated to the cost of goods sold.

General and administrative expenses were $9.5 million for the year ended December 31, 2016, down from $10.6 million incurred in the same period last year. This was driven by a decrease in incentive employee remuneration and in stock-based compensation expense, partially offset by an increase in salary and benefits expenses associated with the Sarnia facility transition from construction to production stage.

Research and development expenses were $7.2 million for the year ended December 31, 2016, down from $20.3 million for the same period last year. This significant decrease is explained by certain non-recurring Sarnia commissioning and start-up costs incurred in 2015 that were recorded as research and development expenses as well as by reduced expenses related to molecular engineering of the yeast, intellectual property and stock-based compensation.

Sales and marketing expenses were $2.9 million for the year ended December 31, 2016, down from $4.0 million for the same period last year. This was due to the expanded commercial role that Mitsui assumed in 2016, particularly in Asia, which allowed the Company to reduce the size of its global commercial team, resulting in a decrease in sales and marketing salaries, benefits and associated costs, including stock-based compensation and travel expenses.

Depreciation of property and equipment and amortization of intangible assets expense increased by $3.8 million to $4.8 million for the year ended December 31, 2016 as compared to $1.1 million for the year ended December 31, 2015.This increase is due to the depreciation of the Sarnia facility assets associated with the beginning of the Sarnia production in the fourth quarter of 2015.

The net financial charge for the year ended December 31, 2016 was income of $750,000 as compared to a net expense of $1.6 million for the year ended December 31, 2015. This expense decrease was mainly due to the mark-to-market adjustment change of $3.6 million on our IPO Warrants, 2011 Warrants and 2009 Warrants, partially offset by an increase in the interest expense, financing charges from the warrant issued in December 2016, and other financing charges in connection with the prepayment of our loan from Tennenbaum Capital Partners LLC.

The Company recorded a net loss attributable to BioAmber Inc. shareholders of $22.5 million, or a loss of $0.78 per share for the year ended December 31, 2016, compared to a net loss of $37.2 million, or a loss of $1.52 per share for the preceding year.

The Adjusted Net Loss Attributable to BioAmber Inc. Shareholders for the year ended December 31, 2016 was $30.8 million, or a loss of $1.07 per share, compared to an Adjusted Net Loss Attributable to BioAmber Inc. Shareholders of $38.0 million, or a loss of $1.55 per share for the year ended December 31, 2015.  Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes (i) the impact of the change in fair value of the IPO and Legacy Warrants and (ii) the grant income from Sustainable Development Technology Canada (SDTC). 

Please refer to Annex A: "Non-GAAP Financial Information—Adjusted Net Loss Attributable to BioAmber Inc. Shareholders" for more information regarding this non-GAAP financial metric.

Webcast and Conference Call Information

BioAmber will discuss these results on a live audio webcast, which will be available on the Internet to investors, members of the news media and the general public at 4:30 p.m. Eastern Time on March 16, 2017. To access the webcast of the conference call, go to the company's website, www.bio-amber.com. Audio of the teleconference is also available by dialing: 

North American callers:  +1 (888) 390-0546     International callers:  +1 (416) 764-8688

Teleconference replays will be available through March 21, 2017: Domestic: +1-888-390-0541

International: +1 416-764-8677   Passcode:  087450#.  A replay of the webcast will also be available approximately two hours after the conclusion of the live webcast on BioAmber's website, for a period of 30 days.

About BioAmber

BioAmber (NYSE: BIOA) is a renewable materials company. Its innovative technology platform combines biotechnology and catalysis to convert renewable feedstock into building block materials that are used in a wide variety of everyday products including plastics, paints, textiles, food additives and personal care products.  For more information visit www.bio-amber.com

Forward-Looking Statements

This press release contains forward-looking statements, which are subject to substantial risks, uncertainties and assumptions, including, without limitation, statements related to (i) our production capacity and the ramping-up of our sales for our Sarnia Bio-SA facility, (ii) the timing of the construction of our next plants, as well as the financing of such plants, and (iii) our potential joint venture with CJCJ which remains subject to several conditions, including due diligence, the negotiation of key considerations and definitive agreements.   All statements other than statements of historical fact contained in this press release are forward-looking statements. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may" or similar expressions.  Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond BioAmber's control.  BioAmber's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors. 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the events and circumstances reflected in the forward-looking statements will be achieved or occur and the timing of events and circumstances and actual results could differ materially from those projected in the forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  For additional disclosure regarding these and other risks faced by BioAmber, see disclosures contained in BioAmber's public filings with the SEC including, the "Risk Factors" section of BioAmber's most recent Annual Report on Form 10-K and the recent quarterly reports on Form 10-Q.


 

 

BioAmber Inc.



Consolidated Statement of Operations



(unaudited, in thousands)








Year Ended December 31,



2016


2015



$


$



(in thousands)






Product sales


$

8,272


$

2,172

Cost of goods sold


13,667


2,613

Operating expenses






General and administrative


9,458


10,594


Research and development, net


7,195


20,286


Sales and marketing


2,915


4,002


Depreciation of property and equipment and
amortization of intangible assets


4,843


1,080


Write-off of intangible assets


-


1,141


Foreign exchange (gain) loss


(176)


984

Operating expenses


24,235


38,087

Operating loss


(29,630)


(38,528)

Amortization of deferred financing costs and debt discounts


3,312


1,079

Financial charges (income), net


(750)


1,589

Grant income


(4,047)


-

Equity participation in losses of equity method investments


-


1

Other expense (income), net


200


(22)

Loss before income taxes


(28,345)


(41,175)

Income (recovery) taxes


26


(4)

Net loss


(28,371)


(41,171)

Net loss attributable to:






BioAmber Inc. shareholders


(22,478)


(37,226)


Non-controlling interest


(5,893)


(3,945)



(28,371)


(41,171)

 

 

BioAmber Inc.




Consolidated Balance Sheet Information




(unaudited, in thousands)









As of        
December 31,
2016


As of        
December 31,
2015

Assets

$


$

Current assets:




Cash and cash equivalents

16,160


6,974

Accounts receivable

987


979

Inventories

4,498


1,749

Prepaid expenses and other current assets

880


1,142

Restricted cash

8,897


-


Total current assets

31,422


10,844

Property and equipment, net

121,628


122,543

Investment in cost and equity method investment

447


447

Intangible assets including goodwill

6,752


6,977

Restricted cash

558


541

Deferred financing costs

524


435


Total assets

161,331


141,787





Liabilities




Current Liabilities:




Accounts payable and accrued liabilities

6,022


15,834

Income taxes payable

115


112

Deferred revenue

1,372


-

Deferred grants

-


3,438

Warrants financial liability

14,497


-

Short-term portion of long term debt

23,299


10,297


Total current liabilities

45,305


29,681

Long-term debt

29,032


28,492

Warrants financial liability

740


12,232

Other long term liabilities

247


443



Total liabilities

75,324


70,848

Redeemable non-controlling interest

37,516


24,584

Shareholders' Equity

48,491


46,355

Total Liabilities and Shareholders' Equity

161,331


141,787


 

 

BioAmber Inc.




Consolidated Statements of Cash Flows




(unaudited, in thousands)









Year Ended December 31


2016


2015


$


$

Operating Activities






Net loss

(28,371)


(41,171)




Adjustments to reconcile net loss to cash:







Stock-based compensation

3,579


4,791




Depreciation and amortization

4,843


1,080




Write-off intangible assets

-


1,141




Loss on disposals of property and equipment

3,312


1,078




Amortization of debt discounts

134


-




Other long-term liabilities

(25)


43




Financial charges (income), net

(5,994)


(1,747)




Grant income

(4,047)


-




Changes in operating assets and liabilities

(11,047)


2,586


Net cash used in operating activities

(37,616)


(32,199)





Investing activities






Acquisition of property and equipment and intangible asset, net of disposals

(668)


(64,390)



Investment in equity method and cost investments

-


(412)


Net cash used in investing activities

(668)


(64,802)





Financing activities






Deferred financing costs

(1,707)


(1,144)



Issuance of long-term debt

26,929


21,967



Repayment of long-term debt

(15,312)


(16,059)



Government grants

1,108


7,947



Net proceeds from issuance of common shares, including by subs.

36,206


42,177


Net cash provided by financing activities

47,224


54,888

Foreign exchange impact on cash

246


(1,956)

Decrease in cash and cash equivalents

9,186


(44,069)

Cash and cash equivalents, beginning of period

6,974


51,043

Cash and cash equivalents, end of period

16,160


6,974

 

 

ANNEX A: Non-GAAP Financial Information

Adjusted Net Loss Attributable to BioAmber Inc. Shareholders

BioAmber presents Adjusted Net Loss Attributable to BioAmber Inc. Shareholders as a supplemental measure of BioAmber's performance. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a non-GAAP financial metric that excludes, for the year ended December 31, 2016, the impact of the change in fair value of the IPO warrants and the Legacy Warrants and the STDC grant income. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders excluded, for the year ended December 31, 2015, the impact of the change in fair value of the IPO warrants and the Legacy Warrants. The above items are excluded from BioAmber's Adjusted Net Loss Attributable to BioAmber Inc. Shareholders because these items are non-cash in nature, or because the amount and timing of these items are either unpredictable or not driven by current operating results and renders comparisons with prior periods and competitors less meaningful. BioAmber believes Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is a useful measure for analysts and investors to evaluate BioAmber's future ongoing performance as this measure allows for a more meaningful comparison of BioAmber's projected cash earnings and performance with its historical results from prior periods and to the results of its competitors. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders corresponds more closely to the cash operating income generated from BioAmber's business and allows investors to gain an understanding of the factors and trends affecting the ongoing cash earnings capabilities of BioAmber's business.

Adjusted Net Loss Attributable to BioAmber Inc. Shareholders has certain limitations in that it does not take into account the impact of certain expenses to BioAmber's consolidated statements of operations.  In evaluating Adjusted Net Loss Attributable to BioAmber Inc. Shareholders, you should be aware that in the future BioAmber may incur expenses similar to the adjustments in this presentation. BioAmber's presentation of Adjusted Net Loss Attributable to BioAmber Inc. Shareholders should not be construed as an inference that BioAmber's future results will be unaffected by unusual or non-recurring items. Adjusted Net Loss Attributable to BioAmber Inc. Shareholders is not a measurement of BioAmber's financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP.

 

BioAmber Inc.





Non-GAAP Financial Information





(unaudited, in thousands, except for net loss per share)










Year Ended December 31,



2016


2015



$


$

Net loss attributable to BioAmber Inc.  Shareholders


(22,478)


(37,226)

Deduct:





Warrants Revaluation income


(5,892)


(2,262)

Grant income


(2,396)


-

Adjusted Net Loss attributable to





BioAmber Inc. shareholders


(30,766)


(38,047)






Adjusted net loss per share attributable to





BioAmber Inc. shareholders - basic


(1.07)


(1.55)






Weighted-average of common shares





outstanding- basic


28,666


24,500

 

 

SOURCE BioAmber Inc.

For further information: BioAmber Investor Contact: Roy McDowall, Sr. VP Communication & Strategy, 514-844-8000 Ext. 260, roy.mcdowall@bio-amber.com


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